Dubai Apartment Sales Prices Plummet 11.7 Percent

Published August 20th, 2019 - 06:30 GMT
Dubai apartments remain the preferred property type
Dubai apartments remain the preferred property type. (Shutterstock)
For Dubai apartments, the median advertised price is Dh1,163 ($316) per sq ft

Dubai apartment sales prices in the first half of 2019 are 11.7 per cent cheaper than they were two years ago and dropped 3.9 per cent compared to H2 2018, said Property Finder, a leading property portal in the region, in a new report.

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Apartments for sale fared worse than rentals, with low to mid-single-digit percentage drops right across the country, according to data in ‘Property Finder Trends’ report, released earlier this month.

For Dubai apartments, the median advertised price is Dh1,163 ($316) per sq ft, revealed the ‘Trends’ report. Ras Al Khaimah apartments for sale had the biggest decline in prices in H1 2019, dropping 6.2 per cent to an advertised median price of Dh560 per sq ft; exactly half the median advertised price in Abu Dhabi which dropped 4.4 per cent to Dh1,120.

Ajman, with a median sq ft advertised price of just Dh269, is still by far the cheapest. Prices dropped 3.9 per cent in H1. Sharjah apartments held their value best in H1 as they have done for the last couple of years. They declined modestly by 1.5 per cent during this half-year to a median advertised price of Dh475 per sq ft.

Apartment communities in Dubai that witnessed the biggest sales price drop in H1 2019 were Al Sufouh (-10.5 per cent), Remraam (-9.6 per cent), Downtown Dubai (-7.4 per cent), Old Town (-7.2 per cent) and Jumeirah Lakes Towers (-6.5 per cent). Mirdif, Jumeirah Village Triangle, Dubai South, Arjan and Al Furjan stayed resilient and resisted the price drop.

Villas for sale

Villa prices in Dubai dropped 4.3 per cent to an advertised median price of Dh855 per sq ft compared to H2 2018. They are 12.1 per cent cheaper than they were in 2017. New affordable off-plan offerings in Dubai South, Dubailand and Town Square were popular with buyers.

Ajman’s villa prices were flat, dropping just 0.6 per cent compared to H2 2018. Sharjah dropped 1.6 per cent while Ras Al Khaimah experienced a significant drop of 5.9 per cent. Abu Dhabi bucked the national downward trend, with a 1.5 per cent increase to a median villa advertised price of Dh827 per sq ft.

Villa communities in Dubai that experienced the biggest decline in sales prices in H1 2019 were Damac Hills (-8.2 per cent), Emirates Hills (-6.6 per cent), Green Community Motor City (-5.4 per cent), Dubai Silicon Oasis (-5.2 per cent), Al Furjan and The Villa (-5.1 per cent). Communities like Living Legends, District One in Mohammed Bin Rashid City, Mirdif, Green Community DIP and Palm Jumeirah Signature Villas recorded zero or a very marginal drop in villa sales prices.

“As new affordable villa communities are getting completed and handed over, we have seen a migration to these communities from popular areas such as Dubai Marina. Families are choosing to live a little further out in the suburban areas of Dubai in order to gain access to a larger property with outside space. We have also seen a large influx of renters converting to home buyers, especially in these new villa communities,” said Lynnette Abad, director of Data & Research, Property Finder.

Transactions in Dubai

Although overall sales transactions are steady and in line with 2018 but the type of properties being purchased is changing. Apartment transactions are down by 5 per cent but villa sales are up by 35 per cent.

Dubai apartments remain the preferred property type, and although their year-on-year transaction numbers have declined, the value has increased. This is reflective of an end-user driven market. End-users tend to buy larger apartments and those in prime locations, while studios and 1-bed apartments that offer higher yields are preferred by investors.

Downtown Dubai saw the most apartment sales in H1 2019 at 1,586, of which 1,288 were off-plan transactions. Dubai Hills Estate (972 off-plan apartment transactions) and The Lagoons in Dubai Creek Harbour (853 off-plan apartment transactions), both Emaar developments, were also popular.

For villas, there have been more transactions but at lower values, mostly in the new, affordable communities targeted at the low to middle income segment. Dubai South with 434 sales (all off-plan) had by far the most villa/townhouse transactions in H1 2019. Town Square with 188 sales (128 off-plan) also fits this description. Another two Emaar projects targeted at mid-upper income end-users were popular: Arabian Ranches 2 had the second most with 331 transactions, 231 of which were off-plan, and Dubai Hills Estate had 208, including 207 off-plan sales.

Meanwhile, some of the higher value, older luxury villa communities have not performed as well as the newer, more affordable projects. Vendors marketing unrenovated, poorly maintained prime located properties in the Palm Jumeirah or Emirates Living communities are at the mercy of the market and some have seen significant losses.

Secondary market vendors who do not need to sell are choosing to hang onto their properties. Richard Waind, managing director at Better Homes writing for ‘Trends’, said: “We are starting to see the availability of property in the secondary market dry up as those with no pressing need to sell hold on to their assets to ride out the current price cycle. This should put a natural handbrake on future price falls.” 

Copyright 2021 Al Hilal Publishing and Marketing Group

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